Note 13 - Stock Option Plan

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 13 - Stock Option Plan

QNB has stock option plans (the Plans) administered by a committee which consists of three or more members of QNB’s Board of Directors. The Plans provide for the granting of either (i) Non-Qualified Stock Options (NQSOs) or (ii) Incentive Stock Options (ISOs). The exercise price of an option, as defined by the Plans, is the fair market value of QNB’s common stock at the date of grant. The Plans provide for the exercise either in cash or in securities of the Company or in any combination thereof.

The 1998 Plan authorizes the issuance of 220,500 shares. The time period by which any option is exercisable under the Plan is determined by the Committee but shall not commence before the expiration of six months after the date of grant or continue beyond the expiration of ten years after the date the option is awarded. The granted options vest after a three-year period. As of December 31, 2013, there were 225,058 options granted, 30,444 options forfeited, 164,814 options exercised and 29,800 options outstanding under this Plan. The 1998 Plan expired March 10, 2008.

The 2005 Plan authorizes the issuance of 200,000 shares. The terms of the 2005 Plan are identical to the 1998 Plan except the options expire five years after the grant date. As of December 31, 2013, there were 143,200 options granted, 45,000 options forfeited, 12,200 options exercised and 86,000 options outstanding under this Plan. The 2005 Plan expires March 15, 2015.

As of December 31, 2013, there was approximately $86,000 of unrecognized compensation cost related to unvested stock option awards granted. That cost is expected to be recognized over the next 25 months.

Stock option activity during 2013 and 2012 was as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at December 31, 2011		156,275		$	21.93
Exercised		(32,775	)		17.53
Forfeited		(15,275	)		23.95
Granted		20,000			21.35
Outstanding at December 31, 2012		128,225			22.72
Exercised		(29,825	)		20.23
Forfeited		(2,600	)		19.79
Granted		20,000			23.20
Outstanding at December 31, 2013		115,800		$	23.51		1.92	$	431
Exercisable at December 31, 2013		57,800		$	25.38		0.72	$	219

As of December 31, 2013, outstanding stock options consist of the following:

	Options outstanding		Exercise price		Remaining life (in years)		Options exercisable		Exercise price
		11,250	$	17.15		0.05		11,250	$	17.15
		13,750		17.25		1.13		13,750		17.25
		3,000		19.76		1.69		3,000		19.76
		16,200		20.00		2.07		-		-
		19,300		21.35		3.07		-		-
		2,500		22.11		2.66		-		-
		20,000		23.20		4.06		-		-
		14,800		32.35		1.05		14,800		32.35
		15,000		33.25		0.32		15,000		33.25
Outstanding at December 31, 2013		115,800	$	23.51		1.92		57,800	$	25.38

The tax benefits and intrinsic value related to total stock options exercised during 2013 and 2012 are as follows:

	2013		2012
Tax benefits related to stock options exercised	$	2	$	19
Intrinsic value of stock options exercised		91		166